The above table shows the probability distribution of cake sales at Busy Betty's Bakery.
-Refer to the table above. Busy Betty sells her cakes for $20 each and her constant marginal cost to produce each cake is $12, which is equal to her (constant) average total cost. What is her expected marginal benefit from holding the 23rd cake in inventory?
Definitions:
Job Costing
A cost accounting method used to track costs to a specific job or project, allowing companies to calculate its profitability.
Process Costing
A costing methodology used in manufacturing where costs are allocated to products based on the processes they go through.
Bill of Materials
A bill of materials is a comprehensive list of raw materials, components, and instructions required to construct, manufacture, or repair a product or service.
Source Document
An original record or document that provides evidence of a financial transaction, used as proof for recording the transaction in accounting systems.
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